Selvaag Bolig Is a Story About Development

Long-term housing development Capital markets update | Oslo 9 November 2017

1 Capital markets update 9 November 2017

09:00 - 09:30 Q3 2017 presentation

Break

09:40 - 10:10 Long-term housing development, Baard Schumann, CEO

10:10 - 10:50 Value creation, Sverre Molvik, CFO

10:50 - 11.00 Selvaag Gruppen’s ownership perspective, Olav Selvaag, Selvaag Gruppen

Break

11:15 - 11:45 The need for new housing in Norway, Nejra Macic, Prognosesenteret

11:45 - 12:20 Developing good projects from a solid land bank, Baard Schumann, CEO

12:20 - 12:30 Strategic priorities and outlook, Baard Schumann, CEO and Sverre Molvik, CFO

12:45 - 13:30 Lunch and mingling

2 Long-term housing development Baard Schumann, CEO 3 A growing population needs housing

4 LONG-TERM HOUSING DEVELOPMENT New housing is an important part of the solution

Demand drivers Housing solutions

Population growth Second-hand housing (80%)

Urbanisation

Cost and access to capital Housing demand Rental (20%)

Labour market conditions

Need for new housing New housing (20%)

5 LONG-TERM HOUSING DEVELOPMENT We have to cut through the short-term noise…

Source: The Norwegian Financial Daily, Dagens Næringsliv, E24, VG, Aftenposten (2017) 6 LONG-TERM HOUSING DEVELOPMENT …and concentrate on long-term development

Løren 1999 Løren 2016

7 Housing for all

8 Selvaag Bolig is a story about development

The Ekeberg The Gullhaug Modular Listed at Oslo House House construction Stock Exchange

Terraced Pluss: Housing buildings with extra services Housing for all

1948 1951 1958 1988 1999 2000 2003 2011 2012 2015 2017 FUTURE

Defined housing concepts

Industrial Veitvet Sold homes for production area NOK 3.2 billion Løren area

50 000 homes completed

9 “It’s better to build 30 000 homes for 15 000 kroner than 15 000 homes for 30 000 kroner”

– Olav Selvaag, Founder

10 Our deliveries since the IPO

What did we say at 2012 IPO? Status Q3 2017

Maintain position as a leading residential developer in Norway Leading in terms of volume, profit and efficiency

Long-term goal of delivering 1 500 homes per year Lower volume, but higher margins

Long-term growth will not affect profitability or financial risk Healthy profits and sound balance sheet

Continue to develop industrial approach to homebuilding Project optimisation and large projects

Increase share of modular-based development Urban-development focus requires on-site construction

Project margins of 12% 23% on average over last 3 years

46% on average since 2013 (start of dividend payments) Annual dividends in the region of 50% of after-tax profits Started dividend payments one year early Dividend pay-out semi-annually from H1 2015 Dividend payments semi-annually from H1 2015 New and more flexible dividend policy

11 Completed > 4 000 homes since 2012…

Accumulated # of units completed 4 411 4 057

3 221

2 393

1 470

792

2012 2013 2014 2015 2016 YTD 2017

Note: Completed 50 000 units from 1948 to 2011 12 …for a total value of ~ NOK 16 billion

Accumulated revenue (IFRS) in NOK billion since 2012 16.2

14.2

11.2

8.0

5.0

2.8

2012 2013 2014 2015 2016 YTD 2017

13 Our deliveries since the IPO

What did we say at 2012 IPO? Status Q3 2017

Maintain position as a leading residential developer in Norway Leading in terms of volume, profit and efficiency

Long-term goal of delivering 1 500 homes per year Lower volume, but higher margins

Long-term growth will not affect profitability or financial risk Healthy profits and sound balance sheet

Continue development of industrial approach to homebuilding Project optimisation and large projects

Increase share of modular-based development Urban-development focus requires on-site construction

Project margins of 12% 23% on average over last 3 years

14 Sharpened focus on value

Illustrative case Focus on value

▪ Long-term growth does not affect profitability

1 500 units at 12% project margin ▪ Reduced risk and increased margins

= ▪ 2 690 units delivered at 23% project margin 900 units at 20% project margin over the past 12 quarters*

▪ Land bank lasts longer

*Q3 2014 – Q3 2017 15 Value of units under construction is the foundation for future profits

Sales value of units under construction in NOK million 7 074 7 047

6 340

5 775 5 709 5 421 5 547 5 238 5 159 5 077 5 075 4 968 4 909 5 031 4 657 4 689 4 740 4 163 3 747 3 572 3 347 3 434

Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

Units* 1 059 993 1 067 1 058 1 131 1 279 1 474 1 474 1 418 1 347 1 308 1 384 1 394 1 426 1 339 1 386 1 344 1 464 1 356 1 479 1 586 1 582

*Inclusive of Selvaag Bolig’s share of joint ventures 16 86% of 2018 completions sold by Q3 2017

Completions per quarter # units

513

▪ 99% of 2017 completions sold by Q3 2017

336 ▪ 86% of 2018 completions sold by Q3 2017 - Expected completions for 2018 223 as of Q3 2017: 850

54 ▪ 78% of total units under construction 60 sold by Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

17 Solid land-bank basis for long-term strategy

Land-bank exposure Strategy

Geographical spread Per Q3 2017

▪ Pursue overall strategy as long-term housing developer

▪ Prepared for market recovery 2018-2019 Trondheim 683 units ▪ Continue development of quality projects in core markets Bergen 303 units Greater-Oslo 8 585 units Stockholm ▪ Land acquisitions throughout the economic cycle Stavanger 105 units 1 549 units

18 Scale and broad customer offering drive volume

Target markets Size and price Housing concepts

Average price per housing unit NOK 3-5 million

Number of units per project

Trondheim > 300 in Oslo

Bergen Greater Oslo Number of units per project Stavanger Stockholm > 150 in other regions

19 High-quality offering and customer satisfaction drive value

3 Selvaag Bolig projects among top ten in reputable 2016 customer satisfaction survey* (awarded in 2017)

#1 Moss Glassverk project #2 Lørenpynten project in Oslo #7 Dockside project in Tønsberg

*Survey: Prognosesenteret

20 Efficient and flexible value chain

6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS

Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales

ZONING SALES START CONSTRUCTION START DELIVERIES

▪ Buy (i) options on unzoned land ▪ Plan and prepare ▪ 60% pre-sale before start-up ▪ Fixed-price contracts with ▪ Target 100% sale at delivery or (ii) ready-to-build land for construction reputable counterpart ▪ Lever acquired land ▪ Prices on remaining 40% to improve ROE increased gradually during sell-out phase ▪ Construction costs financed with construction loans

21 Low-risk business model creates healthy profits

Strategy Value drivers

▪ Presence in fast-growing urban regions with high demand and large market depth Competitive housing offering, ▪ Competitive prices, addressing large customer base targeting growth regions ▪ Defined housing concepts, aimed at wide range of consumers

▪ Value appreciation through refinement of land for housing development Large, actively-managed ▪ Flexibility to develop thousands of homes in growing urban regions land bank ▪ Active asset management

▪ No in-house construction arm; improves flexibility and cost optimisation Efficient and flexible ▪ Project-based business model improves flexibility and reduces risk cost structure ▪ Economies of scale through large projects ▪ Lean organisation reduces overhead

Capital-efficient business model ▪ 60% pre-sale before construction start lowers project financing need and inventory risk backed by strong balance sheet ▪ Sound debt structure and financial flexibility

22 Our long-term ambitions

Strategy Targets

▪ Maintain position as a leading residential developer in Norway Competitive housing offering, ▪ Long-term growth does not affect profitability or financial risk targeting growth regions ▪ Continue developing industrial approach to homebuilding

Large, actively-managed ▪ Land acquisitions throughout the economic cycle land bank ▪ Focus on Greater Oslo, Stavanger, Bergen, Trondheim, and Stockholm

▪ Ensure economies of scale through large projects, typically >300 units in Oslo Efficient and flexible and >150 units in other regions cost structure ▪ Project margin of minimum 12%

▪ High and stable dividends. Minimum 40% of net annual profit, paid in two instalments Capital-efficient business model over the year* backed by strong balance sheet ▪ The company will maintain an equity ratio of minimum 30 per cent

• The size of the dividend will be weighed against the company’s liquidity forecasts and capital adequacy 23 Value creation Sverre Molvik, CFO 24 Status since the IPO

What did we say at 2012 IPO? Status 2012-Q3 2017 What are we going to do

Maintain position as a leading residential Leading in terms of volume, profit and efficiency developer in Norway

Long-term goal of delivering 1 500 homes per Long-term goal of delivering 1 500 homes per year year

Long-term growth will not affect profitability Long-term growth will not affect profitability or or financial risk financial risk

Continue to develop industrial approach Project optimisation and large projects to homebuilding

Urban-development focus requires on-site Increase share of modular-based development construction

Continued project margin of minimum 12% and Project margins of 12% IRR of 12%

Annual dividends in the region of 50% of after-tax profits Minimum 40% of net annual profit, Dividend pay-out semi-annually from H1 2015 paid in semi-annual instalments*

* The size of the dividend will be weighed against the company’s liquidity forecasts and capital adequacy 25 Financial development (NGAAP)

NOK million 3 672 3 511 3 514 3 382 3 252 3 280 3 229 3 217 3 283 3 229 3 113 3 167 2 997 2 888 2 650

24% 25% 21% 19% 18% 15% 15% 15% 16% 16% 16% 15% 15% 15% 16%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017

12 months rolling revenues (NGAAP)* EBITDA margin (NGAAP)*

* Construction costs are exclusive of financial expenses in the segment reporting (NGAAP) 26 Project margin development

NOK million 3 672 3 511 3 514 3 382 3 252 3 280 3 229 3 217 3 283 3 229 3 113 3 167 2 997 2 888 2 650

29% 29% 26% 24% 22% 20% 20% 19% 19% 20% 20% 20% 20% 19% 19%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017

12 months rolling revenues (NGAAP)* Project margin**

* Construction costs are exclusive of financial expenses in the segment reporting (NGAAP) ** Project margins are exclusive of overhead costs 27 Project value creation

6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS

Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales

ZONING SALES START CONSTRUCTION START DELIVERIES

28 Margin development through project stages*

6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS

Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales

Project margin

20%

15%

Project margin 10% 20%

▪ Land acquired with minimum ▪ Adding value through ▪ Value added when ▪ Maximising price in ▪ Delivery in accordance with 12% project margin and building permits and achieving 60% pre-sale accordance with market expectations minimum 12% IRR area utilisation (+2% provisions)

* Assuming flat market development 29 VALUE CREATION Land acquisition - general

6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS

Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales

ZONING SALES START CONSTRUCTION START DELIVERIES

▪ Substantial land bank, to accommodate targets/growth in core areas

▪ Acquire the right mix of zoned and unzoned land in suitable locations - Buy (i) obligations to buy/options on unzoned land, or (ii) ready-to-build land

▪ Optimise land bank, to improve Return on Equity (ROE)

30 VALUE CREATION Land acquisition – risk management

Project management system

▪ No zoning risk; price and market risk eliminated Request for tenders Complaints and Acquisition Zoning Feasibility study Preparations Execution operations - Purchase price decided through land appraisal by three for sales external consultants at the time of zoning approval - Local market presence and expertise in all core regions Decision support Decision ▪ Land acquisitions through all economic cycles Kick-off Legal Zoning Market HES Financial document about site meetin assessment assessment assessment assessment assessment regarding purchase site ▪ Management tool – checklist to minimise risks purchase - Check for pollution

- Restrictions on development Turnkey

▪ Low holding cost (~ 20% of project cost) SEH Contract documents Checklists

▪ Purchase subject to board approval

▪ “Buy land, they don’t make it anymore” Client-controlled contract/module – Mark Twain SEH Contract documents Checklists

31 VALUE CREATION Land acquisition – financial

Capital budgeting

▪ Cash flow/capital budgeting example FINAL ESTIMATE Revenues and costs incl. VAT - Total revenues: NOK 550 million Summary Total Per unit Per sq. m % 0 Revenues total 550 108 000 3 874 000 59 600 100.0% ▪ Project margin of minimum 12% Sum 1-7 Enterprise cost 299 975 000 2 112 500 32 500 54.5% 8 External projecting costs 11 076 000 78 000 1 200 2.0% - In addition: 2% provisions 8 Project management 11 076 000 78 000 1 200 2.0% ▪ IRR of minimum 12% 8 Sales and marketing 15 975 000 112 500 1 731 2.9% 8 Fees and charges 7 384 000 52 000 800 1.3%

- WACC + risk factor 8 Market risk 12 422 160 87 480 1 346 2%

9 Land cost 100 000 000 704 225 10 834 18.2%

▪ Total land cost: X = NOK 100 million 9 Extraordinary land costs 8 307 000 58 500 900 1.5%

Sum 1-9 Project cost ex. finance 466 215 160 3 283 205 50 511 84.7%

10 Financing costs/revenue 17 645 245 124 262 1 912 3.2%

SUM REVENUE 550 108 000 3 874 000 59 600 100.0%

Sum 1-10 SUM COST 483 860 405 3 407 468 52 423 88.0%

RESULT 66 247 595 466 532 7 177 12.0%

IRR = 16.47%

32 VALUE CREATION Project design – general

6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS

Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales

ZONING SALES START CONSTRUCTION START DELIVERIES

▪ Project optimisation - Plan and prepare for optimising construction cost and sales price - Maximise area utilisation - Maximise sellable square meters in accordance with zoning - Optimise mix of apartments and sizes in accordance with zoning and market demand ▪ Obtain building permit - Chance and pace of satisfactory approval increased through expertise, local presence and reputation

SBO: Similar offering on less area 33 VALUE CREATION Project design – financial

Capital budgeting

▪ Cash flow/capital budgeting example FINAL ESTIMATE Revenues and costs incl. VAT - Total revenues: NOK 569 million Summary Total Per unit Per sq. m % 0 Revenues total 569 361 780 4 009 590 61 686 100.0% ▪ Project margin of 15% Sum 1-7 Enterprise cost 299 975 000 2 112 500 32 500 52.7% 8 External projecting costs 11 076 000 78 000 1 200 1.9% - 3% margin added 8 Project management 11 076 000 78 000 1 200 1.9%

- Low-risk stage 8 Sales and marketing 15 975 000 112 500 1 731 2.8%

8 Fees and charges 7 384 000 52 000 800 1.3%

▪ IRR of 20% 8 Market risk 12 807 236 90 192 1 388 2%

9 Land cost 100 000 000 704 225 10 834 17.6%

9 Extraordinary land costs 8 307 000 58 500 900 1.5%

Sum 1-9 Project cost ex. finance 466 600 236 3 285 917 50 553 82.0%

10 Financing costs/revenue 17 387 068 122 444 1 884 3.1%

SUM REVENUE 569 361 780 4 009 590 61 686 100.0%

Sum 1-10 SUM COST 483 987 304 3 408 361 52 436 85.0%

RESULT 85 374 476 601 229 9 250 15.0%

IRR = 19.73%

34 VALUE CREATION Contracting, marketing and pre-sales – general

6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS

Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales

ZONING SALES START CONSTRUCTION START DELIVERIES

Contracting Marketing and pre-sale ▪ No in-house construction arm; all construction ▪ Defined housing concepts, aimed at a wide range activity on competitive tenders of consumers - Significantly lower building costs (fixed price) ▪ 60% pre-sale before start-up (irrevocable purchase contracts) - Reduced exposure to market fluctuations - Lower number of full-time employees

35 VALUE CREATION Contracting, marketing and pre-sale – risk management Project management system

▪ Risk management pre-sales Request for tenders Complaints and Acquisition Zoning Feasibility study Preparations Execution operations - Building permit obtained for sales - Contract with construction companies with solid financial position and track record Tender invitation Preparation for sales Request for / collection of Negotiation and signing of (i.e. Veidekke, PEAB and AF Gruppen) tenders contract(s) Decision support document Kick-off meeting Start pre-sales regarding - Feasibility study provides minimum 12% margin Develop sales support sales start and 12% IRR Turnkey - In addition: 2% provisions SEH Contract documents Checklists

- Bank financing subject to 60% pre-sale Sales market Customer centre Framework agreements

▪ Risk management start of construction Client-controlled contract/module SEH Contract documents Checklists - Achieved 60% sales Sales market Customer centre Framework agreements

Responsible applicant Project planning manager Procurement

Supervisory duty Main business

36 VALUE CREATION Contracting, marketing and pre-sales – financial

Capital budgeting

▪ Cash flow/capital budgeting example FINAL ESTIMATE Revenues and costs incl. VAT - Total revenues: NOK 583 million Summary Total Per unit Per sq. m % 0 Revenues total 583 026 463 4 105 820 63 166 100.0% - NGAAP: Profit in P&L through percentage-of- completion method commences Sum 1-7 Enterprise cost 299 975 000 2 112 500 32 500 51.5% 8 External projecting costs 11 076 000 78 000 1 200 1.9%

- 50% of land loan converted to construction loan 8 Project management 11 076 000 78 000 1 200 1.9% - Total equity in typical project: MNOK 55, 8 Sales and marketing 15 975 000 112 500 1 731 2.7% approximately 10% of turnover 8 Fees and charges 7 384 000 52 000 800 1.3%

8 Market risk 13 080 529 92 116 1 417 2%

▪ Project margin of 17% 9 Land cost 100 000 000 704 225 10 834 17.2% - Declaration of start of construction 9 Extraordinary land costs 8 307 000 58 500 900 1.4% and increase in sales price Sum 1-9 Project cost ex. finance 466 873 529 3 287 842 50 582 80.1% - 2% margin added 10 Financing costs/revenue 17 203 837 121 154 1 864 3.0% SUM REVENUE 583 026 463 4 105 820 63 166 100.0% ▪ IRR of 22% Sum 1-10 SUM COST 484 077 366 3 408 996 52 446 83.0% RESULT 98 949 096 696 825 10 720 17.0%

IRR = 21.96%

37 VALUE CREATION Construction and sale – general

6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS

Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales

ZONING SALES START CONSTRUCTION START DELIVERIES

▪ Construction - Fixed-price contracts with reputable and solid counterpart - Construction costs financed with construction loans - Construction flexibility (module/on-site) - Economies of scale – large projects with more than 150 units

▪ Sales - Maximise price on remaining 40% - Target 100% sales at time of delivery

38 VALUE CREATION Construction and sales – risk management

Project management system

Request for tenders Complaints and Acquisition Zoning Feasibility study Preparation for Execution operations sales

Decision support Start-up of Follow-up of Preparations for Completion with Kick-off meeting document ▪ Limited project risk with 60% pre-sales construction execution handover delivery prior to start-up

▪ For remaining 40%, a 35% price Turnkey reduction would recover equity SEH Contract documents Checklists Customer centre

Client-controlled contract/module

SEH Contract documents Checklists

Customer centre Framework agreements Responsible applicant

Project planning manager Procurement Supervisory duty

Main business Installation - SEH Module - documentation

39 VALUE CREATION Construction and sales – financial

Capital budgeting

▪ Cash flow/capital budgeting example FINAL ESTIMATE Revenues and costs incl. VAT at delivery Summary Total Per unit Per sq. m % - Total revenues: NOK 590 million 0 Revenues total 590 022 780 4 155 009 63 924 100.0% Sum 1-7 Enterprise cost 299 975 000 2 112 500 32 500 51.5%

- No more equity required 8 External projecting costs 11 076 000 78 000 1 200 1.9%

8 Project management 11 076 000 78 000 1 200 1.9% ▪ Project margin of 20% 8 Sales and marketing 15 975 000 112 500 1 731 2.7%

- 3% margin added 8 Fees and charges 7 384 000 52 000 800 1.3% - Low-risk stage 8 Market risk 0 0 0 0.0% 9 Land cost 100 000 000 704 225 10 834 17.2% ▪ IRR of 25% 9 Extraordinary land costs 8 307 000 58 500 900 1.4% Sum 1-9 Project cost ex. finance 455 213 000 3 205 725 49 319 77.2%

▪ Market risk reduced from 2% to 0% 10 Financing costs/revenue 17 011 423 119 799 1 832 2.9%

of project value SUM REVENUE 590 022 780 4 155 090 63 924 100.0%

Sum 1-10 SUM COST 472 224 423 3 325 524 51 162 80.0%

RESULT 117 798 357 829 566 12 763 20.0%

IRR = 24.89%

40 Adding value through all project stages

6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS

Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales

Project margin

20%

15%

Project margin 10% 20%

▪ Land acquired with minimum ▪ Value added through ▪ Value added at achievement ▪ Maximise price in ▪ Delivery in accordance 12% project margin and building permits and of 60% pre-sales accordance with market with expectations minimum 12% IRR area utilisation (+2% provisions)

* Based on a flat market development assumption 41 Project margin development

NOK million 3 672 3 511 3 514 3 382 3 252 3 280 3 229 3 217 3 283 3 229 3 113 3 167 2 997 2 888 2 650

29% 29% 26% 24% 22% 20% 20% 19% 19% 20% 20% 20% 20% 19% 19%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017

12 months rolling revenues (NGAAP)* Project margin**

* Construction costs are exclusive of financial expenses in the segment reporting (NGAAP) ** Project margins are exclusive of overhead costs 42 Land bank valuation

Q4 16: Book value vs. external valuation

NOK million

▪ Book value of NOK 1.4 billion

▪ Value generated through 1 268 project development - Average portfolio 20% value added 2 705 ▪ Third-party market valuation of NOK 2.7 billion 1 437

Book value at time of Gap Valuation Akershus valuation (Nov 2016) Eiendom

43 Dividend policy

Previous dividend policy New dividend policy

Selvaag Bolig’s aim is to manage the group’s Selvaag Bolig’s ambition is to pay high resources so that shareholders secure a return in and stable dividends to its owners. the form of dividend and the rise in the share price. This return will be competitive with other The company aims to pay dividends of minimum investments. 40 per cent of net annual profit, paid in two instalments over the year. However, the size of the The company’s goal is to pay dividends twice a dividend will be weighed against the company’s year totalling up to 50 per cent of its net profit liquidity forecasts and capital adequacy. The company will maintain an equity ratio of minimum 30 per cent

44 Earnings and dividend per share

NOK 4.00 EPS DPS 3.50

3.00

2.50

2.00

1.50 3.00 3.21 2.70 2.39 1.00 1.75 1.50 1.60 0.50 1.20 1.20 0.50 0.00 2013 2014 2015 2016 H1 2017

45 Equity ratio of minimum 30%

50%

45%

40%

35%

30%

25% ▪ Q3 2017 equity ratio 42.4% 20% ▪ Equity ratio of minimum 30% 15%

10%

0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017

46 Value creation wrap-up

▪ Incentivised and results-oriented culture

▪ Adding value in all project stages

▪ Low-risk business model

▪ Large value potential in land bank

▪ Generating healthy profits over time

▪ Strong financial position

▪ Ambition to pay high and stable dividend over time

47 Selvaag Gruppen’s ownership perspective Olav Selvaag 48 SELVAAG GRUPPEN’S OWNERSHIP PERSPECTIVE A long-term supporter of Selvaag Bolig

Selvaag Gruppen is satisfied with current Selvaag Gruppen the largest shareholder holdings, but flexible with regards to future of Selvaag Bolig with an ownership of 53.5% strategic development of the company

Selvaag Gruppen today: Selvaag Gruppen 2012 IPO statement: “Being a long-term, industrial owner is a “Will continue to meet the future with promise to investors who want to benefit Selvaag Bolig” from Selvaag Gruppen’s expertise in housing development”

49 Developing good projects from a solid land bank

Baard Schumann, CEO 50 Sales value of units under construction NOK 7 billion

78% sold Per Q3 2017

51 Sales value* of units potential from existing land bank NOK 43 billion

Trondheim 683 units

Bergen 303 units Greater-Oslo 8 585 units

Stavanger Stockholm 1 549 units 105 units

Land bank potential Q3 2017

*Average sales price per unit based on 3-year average 52 Norway – robust economic conditions

GDP growth 2010 - 2019e Unemployment 2010 - 2019e

6% 12% 5% 10% 4% 8% 3% 6% 2% 4% 1% 2% 0% 0% 2010 2011 2012 2013 2014 2015 2016 2017e 2018e 2019e 2010 2011 2012 2013 2014 2015 2016 2017e 2018e 2019e Norway Sweden Germany UK France Norway Sweden Germany UK France

Population growth 2015 - 2030e and 2040e Interest rates 2010 - 2018e

France 5.3 % 2.5% 8.1 % 2.0% UK 7.9 % 11.8 % 1.5% Germany 0.6 % -0.7 % 1.0%

Sweden 9.7 % 0.5% 14.3 % 0.0% Norway 14.6 % 23.2 % 2010 2011 2012 2013 2014 2015 2016 2017e 2018e -0.5% 2030 2040 Norway Sweden EU UK -1.0%

Source: Bloomberg, International Monetary Fond (IMF) 53 MARKET Regulation for residential mortgage loans

Regulation Effects from regulation

1 Loan cap at 5x annual income ▪ Reduced loan demand from Norwegian households in Q3 2017, according to Norges Bank - Norwegian banks expect further decrease in 2 Loan cap at 60% for secondary homes in Oslo demand for first-time loans going forward - Norwegian banks state that loan cap at 5x annual 3 Instalment required for loans exceeding 60% income has the strongest effect on loan demand of housing value - Lower degree of loan grant flexibility 4 Oslo, limit on loans that do not meet ▪ Loan cap at 5x annual income challenges requirements: Up to 8% of the total loan volume single-person households and first-time buyers - Results in increased demand and prices in the rental market

54 MARKET Declining share of income spent on housing

Housing cost/income

30%

25%

20%

15%

10% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Norway Sweden Denmark

Source: Eurostat 55 MARKET Total household debt and homeownership

300% 292% 277%

250% 222% 211% 200% 178% 178%

150% 150% 130% 122% 108% 93% 100% 80% 78% 70% 60% 62% 63% 58% 50% 58% 45% 50% 37%

0% Denmark Netherlands Norway Switzerland Ireland Sweden UK Finland Spain France Germany

Household debt in % of net disposable income (2015) Homeownership rate (2016)

Source: OECD, Prognosesenteret 56 MARKET Strong urbanisation in Norway since 2000

Population growth in SBO’s regions since 2000 31% 29% 28%

22% 21%

17%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Norway Oslo Akershus Stavanger Bergen Trondheim

Source: Statistics Norway (SSB) 57 MARKET 35% of Norwegian population lives in SBO’s core markets 36% 35% Per cent of total Norwegian population living in *SBO’s regions 35%

34%

33% 33% 32% 31%

1991 1995 1999 2003 2007 2011 2015 2017

*SBO regions: Oslo, Akershus, Bergen, Trondheim, Stavanger Source: Statistics Norway (SSB) 58 MARKET Low share of housing completions in Greater Oslo

Greater Oslo as % of total completions and population growth in Norway

50%

45%

40%

35%

30%

25%

20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Population growth in Greater Oslo Housing completions in Greater Oslo

Greater Oslo = Oslo and Akershus Source: Statistics Norway (SSB) 59 MARKET Housing demand higher than completions

Number of units completed in Oslo, 2001-2016 Units Forecasted annual housing 7 000 demand until 2022 (low and medium) alternatives 6 000

5 000

4 000 Average # of 3 000 completions

2 000

1 000

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Actual completions Estimates based on actual start and time of construction

Source: Oslo kommune, Statistics Norway (SSB) 60 MARKET Newbuild market in Oslo

Total newbuild market in Oslo per half year Newbuild market in Oslo as of Q3 17

Units ▪ Q3 2017 offered for sale: 343 units

3 000 - Down 40% compared with Q3 2016 - Up 9% as of Q3 17 compared with same period 2 500 in 2016

2 000 ▪ Q3 2017 sales: 289

4 486 1 500

2 876 1 000 1 760 500 1 306

0 H1 H2 H1 H2 H1 H2 H1 H2 H1 2013 2014 2015 2016 2013 2013 2014 2014 2015 2015 2016 2016 2017 Annual newbuild sales in Oslo Offered for sale Sold

Source: Røisland & Co

61 MARKET Strong 2017 sales versus peers

Sales activity vs. peers

Units

1 163

883

579 533 556

337 346 350 277 232 178 204 108 106 84 46

Q3 2016 9M 2016 Q3 2017 9M 2017

Housing types Selvaag Bolig: flats, semi-detached and terraced homes Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

62 MARKET Reduced second-hand supply in Oslo in October 2017…

Units

3 000

2 500

2 000

1 500

1 000

500

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Eiendomsverdi 63 MARKET …and increased sales

Units

3 000

2 500

2 000

1 500

1 000

500

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Eiendomsverdi 64 MARKET Second hand supply at historic average year- to-date…

Units

25 000

20 000

15 000

10 000

5 000

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Eiendomsverdi 65 MARKET …with sales slightly below average

Units

20 000

15 000

10 000

5 000

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Eiendomsverdi 66 MARKET Second-hand inventory and units sold in Oslo

Oslo, October* 2008-2017

Units

8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

0 Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Inventory second-hand Units sold

*Unsold units that have been withdrawn from the market are marked as inventory for 9 months before being removed Source: Eiendomsverdi

67 MARKET Second-hand inventory and units sold in Oslo

Oslo, October* 2013-2017

Units

3 000

2 500

2 000

1 500

1 000

500

0 Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. 2013 2014 2015 2016 2017

Inventory second-hand Units sold

*Unsold units that have been withdrawn from the market are marked as inventory for 3 months before being removed Source: Eiendomsverdi

68 MARKET Second-hand inventory and units sold in Stavanger area Stavanger area, October* 2008-2017

Units

2000

1500

1000

500

0 Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Inventory second-hand Units sold

* Unsold units that have been withdrawn from the market are marked as inventory for 9 months Second hand market: Stavanger, Sola, Randaberg and Sandnes before being removed Source: Eiendomsverdi

69 MARKET Second-hand inventory and units sold in Bergen

Bergen, October* 2008-2017

Units

3 000

2 500

2 000

1 500

1 000

500

0 Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Inventory second-hand Units sold

*Unsold units that have been withdrawn from the market are marked as inventory for 9 months before being removed Source: Eiendomsverdi

70 MARKET Second-hand inventory and units sold in Trondheim Trondheim, October* 2008-2017

Units

2 000

1 500

1 000

500

0 Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. Oct. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Inventory second-hand Units sold

*Unsold units that have been withdrawn from the market are marked as inventory for 9 months before being removed Source: Eiendomsverdi

71 SELVAAG BOLIG LAND-BANK DISTRIBUTION Substantial land bank in Norway’s four largest growing urban areas

Land-bank strategy Land bank exposure

Geographical spread ▪ Acquire the right mix of zoned and unzoned land in suitable locations ▪ Land acquisitions in defined core areas ▪ High degree of site utilisation and strategic Trondheim land development 683 units ▪ Substantial land bank to accommodate targets/growth in core areas Bergen ▪ Good infrastructure and public transport 303 units Greater-Oslo 8 585 units ▪ Joint ventures (JVs) Stockholm Stavanger 105 units 1 549 units Note: The numbers represent the size of the land portfolio as at 30 September 2017. All numbers are adjusted for Selvaag Bolig’s share in joint ventures. 1) Greater Oslo area: Oslo, Akershus, Buskerud, Vestfold and Østfold, 2) The residential property development portfolio consists of land plots that are to be paid for when planning permission is received. The portfolio has a development potential of ~5 900 residential units, whereof the company has purchasing obligations for ~5 400 and purchasing options for ~500 units.

72 LAND BANK Land bank in Oslo and Greater Oslo

Løren/Økern/Ensjø 999 units Bærum 3 086 units Tiedemannsbyen 209 units Avløs 631 units Sinsenveien 190 units Lørenskog 2 423 units Ballerud 300 units Kjelsås 312 units Lørenvangen 22 166 units Lørenskog Stasjonsby 153 units Eyvind Lyches vei 280 units Kjelsåsveien 161 312 units Lørenporten 162 units Skårer bolig 1 008 units Fornebu 875 units Hovinenga 116 units LSV 495 units Store 1 Stabekk 200 units Pottemakerveien 156 units Store 2 Stabekk 800 units

312 Lillestrøm units 999 units 2 423 units

Bjerke 1 500 units 1 500 Bjerke 1 500 units Oslo units Bærum 3 086 Oslo South 324 units units Lørenskog Stasjonsby 23 units Gjertsrud Stensrud 300 units

Moss 30 units 324 Asker units Ski 478 units Asker 630 units Kaldnes, Tønsberg 304 units Langhus 234 units Landås 230 units 630 Solberg 183 units Landås acquired 60 units units Ski 61 units Landås option 340 units 304 30 324 units units units

*The numbers are adjusted for Selvaag Bolig’s share in joint ventures 73 LAND BANK Land bank in Stavanger area

Lervig, Stavanger Lervig brygge 448 units Jaasund – Sola 471 units Jaasund 221 units Jaasund option 250 units 471 units 448 Stavanger units

Sandnes Indre vågen 540 units Sandnes Aase gård 90 units Sola

540 Sandnes units

90 units

*The numbers are adjusted for Selvaag Bolig’s share in joint ventures 74 LAND BANK Land bank in Bergen, Trondheim and Stockholm

Trondheim 684 units Lade Allé 97 units Heimdal 161 units Haakon VII gate 4 201 units Travbanevegen 225 units Sweden

684 units Stockholm 105 units Løvholmen 40 units Svea Serenad 65 units Bergen 303 units Sandsliåsen 57 105 units Sandsliåsen 59 140 units Finland Torvmyra 58 units Norway

303 105 units units

*The numbers are adjusted for Selvaag Bolig’s share in joint ventures 75 SELVAAG BOLIG PROJECTS Key projects in selected regions

Fornebu 1 Lørenskog stasjonsby 5

Trondheim 8 Bjerke 2 Lervig brygge 6

Bergen 7 5 4 3 Greater Oslo 1 2 6 Landås, Asker 3 Sandsliåsen 7 Stavanger Stockholm

Sinsenveien, Løren 4 Lade Allé 8

76 Selvaag Bolig to build ~ 2 000 units at Fornebu centre ▪ Land acquired at Fornebu, Bærum ▪ 50/50 JV with Trond and Frederik Mohn ▪ SBO’s largest land acquisition to date ▪ Approximately 2 000 units ▪ Expected sales value NOK 12 billion ▪ Expected sales start 2020

77 Fornebu aquarium and docks ▪ City development, which creates value for multiple stakeholders ▪ Includes the largest aquarium in Northern Europe

78 Bjerke, Oslo ▪ Approximately 1 500 units ▪ Expected sales start 2020

79 Landås, Asker ▪ Approximately 600 units ▪ Expected sales start 2018/19

80 Sinsenveien ▪ Approximately 380 units ▪ Expected sales start 2019 ▪ JV with Veidekke Eiendom

81 Lørenskog Stasjonsby ▪ Approximately 1 500 units, remaining 1 000 units ▪ Sales started 2013

82 Lervig Brygge, Stavanger ▪ Total of 800 units, remaining 450 units ▪ Sales started 2010

83 Sandsliåsen, Bergen ▪ Approximately 370 units ▪ Expected sales start H2 2018

84 Lade Allé, Trondheim ▪ 850-900 units, remaining approximately 600 units ▪ Sales started 2014

85 Strategic priorities and outlook 86 OUTLOOK Strategic priorities and outlook

Strategy Targets

Large, actively-managed ▪ Land acquisitions throughout the economic cycle land bank ▪ Focus on Greater Oslo, Stavanger, Bergen, Trondheim, and Stockholm

▪ Ensure economies of scale through large projects, typically >300 units in Oslo Efficient and flexible and >150 units in other regions cost structure ▪ Project margin of minimum 12%

* The size of the dividend will be weighed against the company’s liquidity forecasts and capital adequacy 87 Thank you for your attention – follow us online!

Next event: 4th quarter 2017 13 February 2018

@SelvaagAksjen